What is Chapter 13 bankruptcy primarily intended for?

Chapter 13 bankruptcy is primarily designed for individuals with regular incomes who are unable to meet their debt obligations but wish to reorganize and repay their debts over time. This type of bankruptcy allows individuals to propose a repayment plan to make installments to creditors over a period typically lasting three to five years. It is most suitable for those who have a steady income source and want to keep their assets while catching up on unpaid debts, such as mortgages or car loans.

This mechanism provides a structured opportunity for individuals to manage their financial situation without suffering the complete liquidation of their assets, which tends to occur in Chapter 7 bankruptcy. By allowing for a debt repayment plan, Chapter 13 thus ensures that individuals can regain control over their finances and work towards a more stable economic future.